How to Get a Loan Without a Job

When you’re between jobs and find yourself in need of a loan, you might wonder: Can you get a loan without a job? Luckily, you have several loan options, even if you’re unemployed. Just be sure you can afford the payments before you apply, or you risk damaging your credit and hurting your chances of getting loans in the future.

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How to get a loan without a job

It can be more difficult to get a personal loan without a job, but there are a few things you can do that might help.

Offer collateral

It may be easier to get a secured loan than an unsecured loan when you don’t have a job. Lenders consider secured loans less risky because the loan is backed by collateral. You might also get a better rate if your loan is secured with something of value.

However, a secured loan is riskier for you because you can lose your asset. If you can’t make your payments, the lender has the right to seize your collateral to cover the loan’s cost.

Add a cosigner

In some cases, getting a loan without a job could be next to impossible, especially if you don’t have an alternative source of income. But, if you can find someone to cosign the loan with you, your chances of loan approval are much better. A cosigner is, in a nutshell, the person ultimately responsible for the loan if you can’t repay it.

You’ll need to ask someone who has good-to-excellent credit, a steady job and sufficient income to repay the loan if you can’t. It’s a big responsibility to agree to cosign a loan, but if you have the right person, it can practically guarantee that you get approved.

Find out lender requirements

Not all lenders will give loans to people without jobs, and not all offer secured loans or loans with cosigners. As you research, it’s important to learn the exact requirements you’ll need to qualify for a loan when you don’t have a job.

For example, some lenders are willing to offer loans to people without a job, but they may require some other type of income, such as Social Security benefits, investment income, alimony or another source. Or, another option — if you are about to start a new job — is to look at a lender like SoFi that considers applicants who have an offer of employment to start within the next 90 days.

Borrow from family or friends

It can be uncomfortable to ask a friend or family member for a loan, but in some cases, it could be your best bet. If you go this route, consider drawing up an agreement stating when and how you’ll pay them back and if interest is included. If you make it a contract with clear terms, your relative or friend may feel more comfortable helping you out with a loan.

Consider other types of loans

When you’re looking for a loan without a job, explore all your loan choices to find the one that makes the most sense for you. Some options to consider include cash advances, lines of credit, personal loans, payday alternative loans (PALs), secured loans and home equity financing.

Types of loans for people without a job

Consider these loan types that may accept borrowers without a job.

Personal loans

A personal loan is one of the most logical choices when you need to borrow money. You can usually apply online with a simple application and possibly receive funding as soon as the same day you apply. But you’ll need to undergo a credit check and lenders ask about your income. However, if you have an alternative source of income — or collateral — you may qualify for fast funding.

No income verification loans

Some loans don’t require income verification as part of the loan process. You may encounter no- or low-doc loans or ones with lower-than-average income requirements. Loan types include online secured loans, title loans and credit card cash advances, for example.

The downside to some of these no-doc or no income verification loans, however, is they’re typically more expensive than other options. But, it may be worth looking into if you’ve exhausted other options.

Home equity loans

Homeowners who are out of a job may want to consider a home equity loan or home equity line of credit (HELOC). A home equity loan is a lump sum loan, whereas a HELOC offers a revolving line of credit that you can draw on as needed.

Both options have fairly strict requirements to qualify, and the loan process can take a while, so this may not be your best option if you need fast funding. But, because these loans are secured by the home, you may qualify for a more competitive interest rate.

Payday alternative loans (PALs)

If you’re a member of a federal credit union, you may qualify for a payday alternative loan (PAL), even if you don’t have a job. These loans typically run from $200 to $1,000, and rates are capped at 28%. They’re specifically designed for borrowers who need fast funding but don’t want to resort to a payday loan.

Some small banks and credit unions also offer a version of a PAL — sometimes known as a hardship loan — where you can get a small loan or line of credit with more relaxed requirements than other loan types. If you have a clean banking record with your regular bank or credit union, this loan type might be a good option for a loan when you’re unemployed.

Credit cards

In a pinch, you could use a credit card if you need a fast loan without a job, but you’ll typically pay high rates for the convenience. Rates are even higher if you take out a cash advance from your credit card, which is usually not the best move.

However, if you qualify for a credit card with a 0% introductory rate, you could get a loan with no interest charges for up to a year or more. But make sure you can pay it off before the regular rate kicks in.

Personal lines of credit

Credit cards offer convenient credit if you don’t have a job, but the interest rates are so high they may not be your best option. As an alternative, consider a personal line of credit instead. Banks, credit unions and some online lenders offer lines of credit for better rates than credit cards, but you must have a decent credit score and meet other requirements to qualify.

Cash advances

You might get a small loan without a job from a cash advance app, and funding is typically fast if you pay a small fee for an instant transfer. There are usually no interest or late fees, but loan amounts are typically small — especially for first-time users — and you may be on the hook for monthly subscription fees.

Many cash advance apps require direct deposit, but there are a few apps that don’t.

Secured loans

If you need a loan without a job but have something of value to offer as collateral, you may qualify for a secured loan. Some borrowers use their car as collateral, but other assets that may qualify include bank accounts, certificates of deposit (CDs), retirement savings or other items of value. But keep in mind that you’re putting your asset at risk if you can’t make your loan payments.

Pawn shop loans

Pawn shops can give you a loan regardless of your employment status. Plus, items that qualify for pawn shop loans are more lenient than for secured bank loans. But, these loans are typically expensive, and if you can’t repay it, the shop keeps your item and resells it.

How lenders determine your eligibility

Lenders consider several factors to determine your creditworthiness and ability to repay the loan. This scrutiny may be even greater if you’re applying for a loan without a job.

• Credit score. Borrowers with credit scores of 670 or higher can usually qualify for loans at competitive rates, but that determination also depends on the rest of your credit profile and other factors.
• Credit history. Your credit history shows lenders how you’ve managed debt and the types of debt you’ve had. Most lenders like a good credit mix (e.g., both installment and revolving credit) and a long history of on-time payments.
• Income. Lenders want to see that you have the means to repay the loan, which is why it’s so much harder to get a loan without a job. However, some lenders accept other income sources, such as retirement income, Social Security benefits or child support.
• Debt-to-income (DTI) ratio. A DTI ratio describes your total monthly debt payments divided by your monthly income. A “good” DTI is typically 35% or less, but some lenders may accept as high as 43% to 50%. However, given that you’re currently unemployed, lenders might like to see a lower number.

How to apply for a loan when you don’t have a job

When you’re getting ready to apply for a loan, it’s important to have a plan, do your research and be prepared to meet lender requirements.

• Assess your budget. Make sure you have enough money in your budget to afford your loan repayments. Carefully assess any income and ensure it covers your immediate needs before allocating any funds to loan repayments.
• Determine how much you need to borrow. Define your financial goal and how much it’ll take to get there. It’s usually best to only borrow as much as you need.
• Check your credit score. Your credit score becomes even more important if you need a loan without a job. Plus, knowing your score can also help guide you toward lenders that accept borrowers in your credit range.
• Compare lender requirements. Some lenders have more lenient requirements than others — or may have cosigner or secured options — so compare multiple lenders to find the best deal for your situation.
• Gather your documents. Even if you aren’t currently employed, most lenders want to see at least some financial documentation. Be prepared to show your most recent W-2s, tax returns, bank statements or other required paperwork. You may even want to provide a letter of intent if you’re about to start a new job.

You may also want to assess your options for collateral or using a cosigner if those are the only ways you can qualify for a loan without a job.

What counts as a source of income when you don’t have a job

Even if you’re not technically employed, you may be able to use other forms of income to qualify for a loan. The following income sources could be acceptable to some lenders:

• Investment income
• Social Security or disability benefits
• Retirement income
• Child support
• Alimony
• Unemployment benefits
• Rental income
• Trust funds

Some lenders may also consider any funds you bring in from gig work, side jobs or freelance work, even if it doesn’t amount to a steady full-time job.

Risks of getting a loan without a job

Consider these risk factors before you decide if getting a loan without a job is the best move for you right now.

• Impact on credit score. If you have difficulty making on-time payments — or worse, default on the loan — the damage to your credit history can be severe. That’ll make it much harder to get loans in the future.
• Higher rates and fees. Applicants without a job are considered riskier, which typically means they’ll pay higher rates and more fees than employed borrowers.
• Lower loan amounts. Because you don’t have a job, you may not qualify for as large of a loan as you want.

Bottom line

It can be tough to get a loan without a job, but you’re not without options. It’s especially helpful if you can prove that you have another source of income, such as investment income, unemployment benefits or alimony. But you still might be considered a riskier borrower, which can translate into higher rates and fees.

Loan options to consider include personal loans, cash advance apps, personal lines of credit, credit cards, secured loans and payday alternative loans. Just be sure to compare lenders, research the requirements needed to qualify and try not to borrow more than you need.

Frequently asked questions

Is it possible to get a loan with no income?

It’s much more difficult to get a loan without a job if you have zero income. While many banks consider alternative income sources — like retirement income or Social Security benefits — you’ll likely need collateral or a cosigner.

What is the fastest way to get a loan without a job?

If approved, online lenders can often fund your loan as soon as the same business day you apply. Or, if you have something of value, you could walk into a pawn shop and get a loan today.

Can I get a $1,000 loan with no job?

It’s possible to get a $1,000 loan without a job, but you will likely need some form of income, such as unemployment benefits. If you don’t have any income at all, your only borrowing options might require collateral or a cosigner.

What is a hardship loan?

Hardship loans — sometimes known as emergency loans — are usually offered by smaller, local banks or credit unions to customers in need. Loan amounts are usually small, but it might be enough to tide you over, and interest rates are typically reasonable. A hardship loan is similar to a PAL.